PAL vs.
Civil Aeronautics Board proposed facility will meet a reasonable want of the public and
Philippine Airlines, Inc. vs. Civil Aeronautics Board and
Grand International Airways G.R. No. 119528, March
26, 1997
207 SCRA 538
FACTS:
Private respondent GrandAir applied for a Certificate of Public
Convenience and Necessity with the Civil Aeronautics Board
(CAB). This application was opposed by petitioner PAL which is
a holder of a legislative franchise to operate air transport
services alleging that that the CAB had no jurisdiction to hear
the petitioner’s application until GrandAir has first obtained a
franchise to operate from Congress.
ISSUE:
WON the CAB had the jurisdiction to hear the application
because GrandAir did not possess a legislative franchise.
WON Congress, in enacting Republic Act 776, has delegated
the authority to authorize the operation of domestic air
transport services to the respondent Board, such that
Congressional mandate for the approval of such authority is no
longer necessary.
RULING:
Yes. The Civil Aeronautics Board has the authority to issue a
Certificate of Public Convenience and Necessity, or Temporary
Operating Permit to a domestic air transport operator, who,
though not possessing a legislative franchise, meets all the
other requirements prescribed by the law.
There is nothing in the law nor in the Constitution, which
indicates that a legislative franchise is an indispensable
requirement for an entity to operate as a domestic air
transport operator. Although Section 11 of Article XII
recognizes Congress’ control over any franchise, certificate or
authority to operate a public utility, it does not mean Congress
has exclusive authority to issue the same. Franchises issued by
Congress are not required before each and every public utility
may operate. In many instances, Congress has seen it fit to
delegate this function to government agencies, specialized
particularly in their respective areas of public service.
Congress, gave CAB the power to issue permits for the
operation of domestic transport services. It has delegated to
the said body the authority to determine the capability and
competence of a prospective domestic air transport operator to
engage in such venture.
NOTES:
The use of the word “necessity”, in conjunction with “public
convenience” in a certificate of authorization to a public service
entity to operate –
Many and varied are the definitions of certificates of public
convenience which courts and legal writers have drafted. Some
statutes use the terms “convenience and necessity” while
others use only the words “public convenience.” The terms
“convenience and necessity”, if used together in a statute, are
usually held not to be separable, but are construed together.
Both words modify each other and must be construed
together. The word ‘necessity’ is so connected, not as an
additional requirement but to modify and qualify what might
otherwise be taken as the strict significance of the word
necessity. Public convenience and necessity exists when the
supply a need which the existing facilities do not adequately
afford. It does not mean or require an actual physical necessity
or an indispensable thing. “The terms ‘convenience’ and
‘necessity’ are to be construed together, although they are not
synonymous, and effect must be given both. The convenience
of the public must not be circumscribed by according to the
word ‘necessity’ its strict meaning or an essential requisites.”
The use of the word “necessity”, in conjunction with “public
convenience” in a certificate of authorization to a public service
entity to operate, does not in any way modify the nature of
such certification, or the requirements for the issuance of the
same. It is the law which determines the requisites for the
issuance of such certification, and not the title indicating the
certificate.
Philippine Air Lines vs. Court of Appeals
GR 120262, 17 July 1997)
FACTS:
On 23 October 1988, Leovigildo A. Pantejo, then City Fiscal of
Surigao City, boarded a PAL plane in Manila and disembarked
in Cebu City where he was supposed to take his connecting
flight to Surigao City. However, due to typhoon Osang, the
connecting flight to Surigao City was cancelled. To
accommodate the needs of its stranded passengers, PAL
initially gave out cash assistance of P 100.00 and, the next
day, P200.00, for their expected stay of 2 days in Cebu.
Pantejo requested instead that he be billeted in a hotel at the
PAL’s expense because he did not have cash with him at that
time, but PAL refused. Thus, Pantejo was forced to seek and
accept the generosity of a co-passenger, an engineer named
Andoni Dumlao, and he shared a room with the latter at Sky
View Hotel with the promise to pay his share of the expenses
upon reaching Surigao. On 25 October 1988 when the flight
for Surigao was resumed, Pantejo came to know that the hotel
expenses of his co-passengers, one Superintendent Ernesto
Gonzales and a certain Mrs. Gloria Rocha, an Auditor of the
Philippine National Bank, were reimbursed by PAL. At this
point, Pantejo informed Oscar Jereza, PAL’s Manager for
Departure Services at Mactan Airport and who was in charge of
cancelled flights, that he was going to sue the airline for
discriminating against him. It was only then that Jereza offered
to pay Pantejo P300.00 which, due to the ordeal and anguish
he had undergone, the latter declined.
Pantejo filed a suit for damages against PAL with the RTC of
Surigao City which, after trial, rendered judgment, ordering
PAL to pay Pantejo P300.00 for actual damages, P150,000.00
as moral damages, P100,000.00 as exemplary damages,
P15,000.00 as attorney’s fees, and 6% interest from the time
of the filing of the complaint until said amounts shall have
been fully paid, plus costs of suit.
On appeal, the appellate court affirmed the decision of the
court a quo, but with the exclusion of the award of attorney’s
fees and litigation expenses.
The Supreme Court affirmed the challenged judgment of Court
of Appeals, subject to the modification regarding the
computation of the 6% legal rate of interest on the monetary
awards granted therein to Pantejo.
ISSUE:
Whether petitioner airlines acted in bad faith when it failed and
refused to provide hotel accommodations for respondent
Pantejo or to reimburse him for hotel expenses incurred by
reason of the cancellation of its connecting flight to Surigao
City due to force majeur.
HELD:
A contract to transport passengers is quite different in kind and
degree from any other contractual relation, and this is because
of the relation which an air carrier sustains with the public. Its
business is mainly with the travelling public. It invites people to
avail of the comforts and advantages it offers. The contract of
air carriage, therefore, generates a relation attended with a
public duty. Neglect or malfeasance of the carrier’s employees
naturally could give ground for an action for damages.
The discriminatory act of PAL against Pantejo ineludibly makes
the former liable for moral damages under Article 21 in relation
to Article 2219 (10) of the Civil Code. As held in Alitalia Airways
vs. CA, et al., such inattention to and lack of care by the airline
for the interest of its passengers who are entitled to its utmost
consideration, particularly as to their convenience, amount to
bad faith which entitles the passenger to the award of moral
damages.
Moral damages are emphatically not intended to enrich a
plaintiff at the expense of the defendant. They are awarded
only to allow the former to obtain means, diversion, or
amusements that will serve to alleviate the moral suffering he
has undergone due to the defendant’s culpable action and
must, perforce, be proportional to the suffering inflicted.
However, substantial damages do not translate into excessive
damages. Herein, except for attorney’s fees and costs of suit,
it will be noted that the Courts of Appeals affirmed point by
point the factual findings of the lower court upon which the
award of damages had been based.
The interest of 6% imposed by the court should be computed
from the date of rendition of judgment and not from the filing
of the complaint.
The rule has been laid down in Eastern Shipping Lines, Inc. vs.
Court of Appeals, et. al. that “when an obligation, not
constituting a loan or forbearance of money, is breached, an
interest on the amount of damages awarded may be imposed
at the discretion of the court at the rate of 6% per annum. No
interest, however, shall be adjudged on unliquidated claims or
damages except when or until the demand can be established
with reasonable certainty. Accordingly, where the demand is
established with reasonable certainty, the interest shall begin
to run from the time the claim is made judicially or
extrajudicially (Art. 1169, Civil Code) but when such certainty
cannot be so reasonably established at the time the demand is
made, the interest shall begin to run only from the date the
judgment of the court is made (at which time the
quantification of damages may be deemed to have been
reasonably ascertained). The actual base for the computation
of legal interest shall, in any case, be on the amount finally
adjudged.” This is because at the time of the filling of the
complaint, the amount of the damages to which Pantejo may
be entitled remains unliquidated and not known, until it is
definitely ascertained, assessed and determined by the court,
and only after the presentation of proof thereon.
Philippine Airlines v. Savillo
Facts:
Savillo was a judge of the RTC of Iloilo
He was invited to participate in the 1993 ASEAN Seniors
Annual Golf Tournament in Jakarta Indonesia.
So, in order to take part in such event, he purchased a ticket
from PAL with
the following itinerary: Manila-Singapore-Jakarta-Singapore-
Manila.
PAL would take them from Manila to Singapore, while
Singapore Airlines
would take them from Singapore to Jakarta.
When they arrived in Singapore, Singapore Airlines rejected
the tickets of Savillo because they were not endorsed by PAL.
It was explained that if Singapore Airlines honored the tickets
without PALS’ endorsement, PAL would not pay Singapore
Airlines for their passage.
 Savillo demanded compensation from both PAL and
Singapore Airlines, but
his efforts were futile. He then sued PAL after 3 years,
demanding moral damages.
PAL , in its MTD, claimed that the cause of action has already
prescribed invoking the Warsaw Convention (providing for a 2
year prescriptive period).
Both RTC and CA ruled against PAL.
Issues:
What is the applicable law, the Civil Code or the Warsaw
Convention? Has the action prescribed?
Held:
The Civil Code is applicable. Therefore the action has not yet
prescribed for theprescription period is 4 years.
If cause of action claims moral damages, not
covered by Warsaw Convention.
Article 19 of the Warsaw Convention provides for liability on
the part of a carrier for “damages occasioned by delay in the
transportation by air of passengers, baggage or goods. Article
24 excludes other remedies by further providing that “(1) in
the cases covered by articles 18 and 19, any action for
damages, however founded, can only be brought subject to
the conditions and limits set out in this convention.” Therefore,
a claim covered by the Warsaw Convention can no longer be
recovered under local law, if the statue of limitations
of two years has elapsed. Nevertheless, this Court notes that
jurisprudence in the Philippines and the United
States also recognizes that the Warsaw Convention does not
“exclusively regulate” the relationship between passenger and
carrier on an international flight.
In U.S. v. Uy, this Court distinguished between the (1) damage
to the passenger’s baggage and (2) humiliation he suffered at
the hands of the airline’s employees.
The First cause of action was covered by the Warsaw
Convention which prescribes in two years, while the second
was covered by the provisions of the Civil Code on torts, which
prescribes in four years.
In Mahaney v. Air France (US case), the court therein ruled
that if the plaintiff were to claim damages based solely on the
delay she experienced- for instance, the costs of renting a van,
which she had to arrange on her own as a consequence of the
delay the complaint would be barred by the two–year statute
of limitations.
However, where the plaintiff alleged that the airlines subjected
her to unjust discrimination or undue or unreasonable
preference or disadvantage, an act
punishable under the US law, then the plaintiff may
claim purely nominal compensatory damages for humiliation
and hurt feelings, which are not provided for by the Warsaw
Convention.
In the Petition at bar, Savillo’s Complaint alleged that both PAL
and Singapore Airlines were guilty of gross negligence, which
resulted in his being subjected to “humiliation, embarrassment,
mental anguish, serious anxiety, fear and distress” therefore
this case is not covered by the Warsaw Convention. When the
negligence happened before the performance of the contract
of carriage, not covered by the Warsaw Convention.
Also, this case is comparable to Lathigra v. British Airways.
In that case, it was held that the airlines’
negligent act of reconfirming the passenger’s reservation days
before departure and failing to inform the latter that the flight
had already been discontinued is not
among the acts covered by the Warsaw Convention, since the
alleged negligence did not occur during the performance of the
contract of carriage but, rather, days
before the scheduled flight.
In the case at hand, Singapore Airlines barred Savillo from
boarding the Singapore Airlines flight because PAL
allegedly failed to endorse the tickets of private
respondent and his companions, despite PAL’s assurances to
Savillo that Singapore Airlines had already confirmed their
passage. While this fact still needs to heard and established by
adequate proof before the RTC, an action based on these
allegations will not fall under the Warsaw Convention, since
the purported negligence on the party of PAL did not occur
during the performance of the contract of carriage but days
before the scheduled flight. Thus, the present action cannot be
dismissed based on the Statue of Limitations provided under
Article 29 of the Warsaw
Convention
China Airlines VS Chiok
GR 152122 30 July 2003
FACTS:
Daniel Chiok purchased a ticket from China Airlines Ltd. Covering
Manila-Taipei-Hong Kong-Manila. The ticket was exclusively
endorsable to Philippine Airlines. The trips covered by the ticket
were pre-scheduled and confirmed.
In Taipei, Chiok went to CAL office to confirm his Hong Kong-
Manila flight. CAL attached a yellow sticker, indicating that flight
was OK.
In Hong Kong, Chiok went to PAL office to confirm his Manila
flight. PAL confirmed and attached its own sticker.
During the scheduled flight bound to Manila, it was cancelled
due to a typhoon. All confirmed ticket holders were booked
automatically for it’s next flight (next day)
However on the following day, a PAL employee informed Chiok
that his name did not appear in PAL’s computer list of
passengers and therefore could not be permitted to board PAL
flight no. PR 307.
Chiok filed a complaint for damages.
The Regional Trial Court held that CAL and PAL jointly and
severely liable to correspondent, affirmed by Court of Appeals.
ISSUE:
WON China Airline is liable as a principal carrier?
HELD:
In citing several cases:
As the principal in the contract of carriage, the petitioner in
British Airways v. Court of Appeals was held liable, even when
the breach of contract had occurred, not on its own flight, but
on that of another airline. The Decision followed our ruling in
Lufthansa German Airlines v. Court of Appeals, in which we had
held that the obligation of the ticket-issuing airline remained and
did not cease, regardless of the fact that another airline had
undertaken to carry the passengers to one of their destinations.
In the instant case, following the jurisprudence cited above,
PAL acted as the carrying agent of CAL. In the same way that
we ruled against British Airways and Lufthansa in the
aforementioned cases, we also rule that CAL cannot evade
liability to respondent, even though it may have been only a
ticket issuer for the Hong Kong-Manila sector.
Transportation Case Digest: British Airways V. CA
(1993)
G.R. No. 92288 February 9, 1993
Lessons Applicable: Actionable Document
(Transportation)
FACTS:
 February 15, 1981: First International Trading and
General Services Co. (First Int'l), a duly licensed domestic
recruitment and placement agency, received a telex
message from its principal ROLACO Engineering and
Contracting Services (ROLACO) in Jeddah, Saudi Arabia to
recruit Filipino contract workers in its behalf
 Early March 1981: ROLACO paid British Airways, Inc. (BA)
Jeddah branch the airfare tickets for 93 contract workers
with specific instruction to transport the workers to
Jeddah on or before March 30, 1981
 As soon as BA received a prepaid ticket advice from its
Jeddah branch informed First Int'l.
 Thereafter, First Int'l instructed ADB Travel and Tours.
Inc. (its travel agent) to book the 93 workers with BA but
it failed
 So First Int'l had to borrow P304,416.00 for the purchase
of airline tickets from the other airlines for the 93 workers
who must leave immediately since the visas are valid only
for 45 days and the Bureau of Employment Services
mandates that contract workers must be sent to the job
site within a period of 30 days
 First week of June, 1981: First Int'l was again informed
by BA that it had received a prepaid ticket advice from its
Jeddah branch for the transportation of 27 contract
workers.
 Immediately, First Int'l instructed its ADB to book the 27
contract workers with the BA but only 16 seats were
confirmed and booked on its June 9, 1981 flight.
 June 9, 1981: only 9 workers were able to board said
flight while the remaining 7 workers were rebooked to:
 June 30, 1981 - again cancelled by British without any
prior notice to either First Int'l or the workers
 July 4,1981 - (6 + 7 workers) 13 workers were again
cancelled and rebooked to July 7, 1981.
 July 6, 1981: First Int'l paid the travel tax of the workers
as required by BA but when the receipt of the tax
payments was submitted, only 12 seats were confirmed
for July 7, 1981 flight
 July 7, 1981: Flight was again cancelled without any prior
notice
 12 workers were finally able to leave for Jeddah after First
Int'l had bought tickets from the other airlines
 As a result of these incidents, First Int'l sent a letter
to BA demanding compensation for the damages it had
incurred by the repeated failure to transport its contract
workers despite confirmed bookings and payment of the
corresponding travel taxes.
 July 23, 1981: the counsel of First Int'l sent another letter
to BA demanding P350,000.00 damages and unrealized
profit or income - denied
 August 8, 1981: First Int'l received a telex message
from ROLACO cancelling the hiring of the remaining
recruited workers due to the delay in transporting the
workers to Jeddah.
 January 27, 1982: First Int'l filed a complaint for damages
against First Int'l
 CA Affirmed RTC: BA to pay First Int'l damages, attorneys
fees and costs
ISSUE: W/N BA is not liable because there was no contract of
carriage as no ticket was ever issued
HELD: Affirmed. MODIFICATION that the award of actual
damages be deleted (reimbursed by ROLACO)
 In dealing with the contract of common carriage of
passengers for purpose of accuracy, there are two (2)
aspects of the same, namely:
 (a) the contract "to carry (at some future time)," which
contract is consensual and is necessarily perfected by
mere consent - applicable in this case
 (b) the contract "of carriage" or "of common carriage"
itself which should be considered as a real contract for not
until the carrier is actually used can the carrier be said to
have already assumed the obligation of a carrier
 Even if a prepaid ticket advice (PTA) is merely an advice
from the sponsors that an airline is authorized to issue a
ticket and thus no ticket was yet issued, the fact remains
that the passage had already been paid for by the
principal of the appellee, and the appellant had accepted
such payment
 Besides, appellant knew very well that time was of the
essence as the prepaid ticket advice had specified the
period of compliance therewith, and with emphasis that it
could only be used if the passengers fly on BA
 involvement of the BA in the contract "to carry" was well
demonstrated when the it immediately advised First Int'l
 Acts of BA indeed constitute malice and evident bad faith
which had caused damage and besmirched the reputation
and business image fo First Int'l
British Airways v. Court of Appeals
G.R. No. 121824, 29 January 1998, 285 SCRA 450
FACTS:
On April 16, 1989, Mahtani is on his way to Bombay, India from
Manila. His trip was Manila-Hong Kong via PAL and then Hong
Kong-India via British Airways. Prior to his departure, he
checked in two pieces of luggage containing his clothing and
other personal effects, confident that the same would be
transferred to his BA flight. Unfortunately, when he arrived in
India, he discovered that his luggage was missing.
The RTC awarded Mahtani damages which was affirmed by CA.
ISSUE:
Whether or not in a contract of air carriage a declaration by the
passenger is needed to recover a greater amount?
RULING:
American jurisprudence provides that an air carrier is not liable
for the loss of baggage in an amount in excess of the limits
specified in the tariff which was filed with the proper authorities,
such tariff being binding on the passenger regardless of the
passenger’s lack of knowledge thereof or assent thereto. This
doctrine is recognized in this jurisdiction.
The inescapable conclusion that BA had waived the defense of
limited liability when it allowed Mahtani to testify as to the actual
damages he incurred due to misplacement of his luggage,
without any objection.
It is a well-settled doctrine that where the proponent offers
evidence deemed by counsel of the adverse party to be
inadmissible for any reason, the latter has the right to object.
However, such right is a mere privilege which can be waived.
Necessarily, the objection must be made at the earliest
opportunity, in case of silence when there is opportunity to
speak may operate as a waiver of objections.
G.R. No. 185891, June 26, 2013 CATHAY PACIFIC
AIRWAYS, Petitioner, v. JUANITA REYES, WILFI EDO
REYES, MICHAEL ROY REYES, SIXTA LAPUZ, AND
SAMPAGUITA TRAVEL CORP., Respondents.
TOPIC: Diligence of a good father of a family
FACTS
Wilfredo made a travel reservation with Sampaguita Travel for
his family’s trip to Adelaide, Australia. Upon confirmation of their
flight schedule, Wilfredo paid for the airfare and was issued 4
Cathay Pacific roundtrip airplane tickets for Manila-Hong Kong-
Adelaide-Hong Kong-Manila.
One week before they were scheduled to fly back home,
Wilfredo reconfirmed his family’s return flight with the Cathay
Pacific office in Adelaide. They were advised that the reservation
was “still okay as scheduled”.
On the day of their scheduled departure from Adelaide,
Wilfredo and his family arrived at the airport on time. When the
airport check-in opened, Wilfredo was informed by a staff from
Cathay Pacific that Wilfredo’s family did not have confirmed
reservations, and only Sixta’s flight booking was confirmed.
Travel that it was actually Cathay Pacific which cancelled their
bookings.
ISSUE: Whether Cathay Pacific breached its contract of carriage
with the Wilfredo’s family?
Yes Whether Sampaguita breached its contract of services with
Wilfredo’s family? Yes
HELD:
Cathay Pacific breached its contract of carriage with the
Reyeses when it disallowed them to board the plane in Hong
Kong going to Manila on the date reflected on their tickets. Thus,
Cathay Pacific opened itself to claims for compensatory, actual,
moral and exemplary damages, attorney’s fees and costs of suit.
In contrast, the contractual relation between Sampaguita
Travel and respondents is a contract for services. The object of
the contract is arranging and facilitating the latter’s booking and
ticketing. It was even Sampaguita Travel which issued the
tickets.
Since the contract between the parties is an ordinary one for
services, the standard of care required of respondent is that of
a good father of a family under Article 1173 of the Civil Code.
This connotes reasonable care consistent with that which an
ordinarily prudent person would have observed when
confronted with a similar situation. The test to determine
whether negligence attended the performance of an obligation
is: did the defendant in doing the alleged negligent act use that
reasonable care and caution which an ordinarily prudent person
would have used in the same situation? If not, then he is guilty
of negligence.
There was indeed failure on the part of Sampaguita Travel to
exercise due diligence in performing its obligations under the
contract of services. It was established by Cathay Pacific,
through the generation of the PNRs, that Sampaguita Travel
failed to input the correct ticket number for Wilfredo’s ticket.
Cathay Pacific even asserted that Sampaguita Travel made two
fictitious bookings for Juanita and Michael.
The negligence of Sampaguita Travel renders it also liable for
damages.

Although, they were allowed to board the flight to Hong Kong,

not all of them were allowed to board the flight to Manila as it
was fully booked. Only Wilfredo’s mother-in-law, Sixta, was
allowed to proceed to Manila from Hong Kong.

On the following day, the Reyeses were finally allowed to

board the next flight bound for Manila.

Upon arriving in the Philippines, Wilfredo went Sampaguita

Travel to report the incident. He was informed by Sampaguita